Hi Mandelbrot,
Sorry, I'm not making a hypothesis. The real question is, is it really 42% tax? I'm not an Irish, I'm not sure how the income tax calculated, however, 42% income tax on a 9k income doesn't seem to be reasonable. Or, does it?
I'm really not sure...If this is the case then the smart thing to do is to put as little capital as you can into the purchase of the property and pay an interest only mortgage for as long as the banks will allow you. Save the capital repayment on the side line and pay the mortgage off when the interest only ends and quit being a landlord and live in it yourself!!With taxes this high....the only benefit to becoming a landlord is for the long haul, 15-20 years and hope that capital appreciation is worth it.
what if you are a non-resident landlord?can you not claim the 75% of the mortgage interest if not a PAYE worker then?...that would mean huge losses if for example receiving 10000 in rent, and say 2000 in expenses...you would pay 41% + 4% + 7% = 52% on 8000.So effectively 4160 to the taxman, leaving only 3840 to pay the mortgage for the year.Are these figures really correct?.If so how are there any buy to let landlords out there.Just doesn't add up....
I found a website stating that its 20% up to €68,000, and 41% over it.
Even so, the yield after tax and expenses is still very low compare globally - which makes it no point in taking the risk to buy properties in Ireland.
If there is no (or low) incentive to own a property in Ireland, why the market was high and everyone wants to own a property before the bubble burst?
Just out of curiosity, I suspect that the yield after tax few years ago is even worse than current market.
It is very like to be a negative yield for a buy-to-let as the house price was like double few years ago. Right?
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